Structuring Earnouts in M&A Transactions: Effective Approaches to Bridging the Valuation Gap

Drafting Provisions that Protect Buyers and Sellers and Reduce Post-Closing Disputes

A live 90-minute CLE webinar with interactive Q&A


Thursday, May 10, 2018

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

or call 1-800-926-7926

This CLE webinar will guide deal counsel in negotiating and structuring earnout clauses in M&A agreements that benefit buyers and sellers and reduce the likelihood of post-closing disputes.

Description

M&A transactions routinely include earnout provisions as a valuation-bridging mechanism to alleviate concerns by both parties about tendering or receiving a fair purchase price. Earnouts can allow either an upward price adjustment post-closing—when sufficient value is created to justify a higher purchase amount—or innovative financing for an originally agreed upon price.

While earnouts are a beneficial tool for parties in M&A deals, transactions involving earnouts are complicated and fraught with risk. Earnouts often deter disagreements during the negotiation of the deal price only to result in post-closing disputes over the earnout itself.

Counsel must draft explicit, specific, business-contextualized provisions and procedures relating to the calculation of the earnout and the parties’ respective obligations.

Listen as our authoritative panel explains recent trends in the use of earnouts, the pros and cons of including them in M&A deals, and strategies for structuring earnout terms in a way that benefits and protects both buyers and sellers.

READ MORE

Outline

  1. Earnouts
    1. Current market trends
    2. Advantages and disadvantages of earnouts
    3. Relevant performance benchmarks
  2. Structuring earnout provisions
    1. Determining operating control issues
    2. Dealing with unanticipated events
    3. Protecting against fraudulent actions
    4. Post-closing activity by buyer and seller
    5. Resolving conflicting positions
    6. Tax implications

Benefits

The panel will review these and other challenging issues:

  • What approaches are effective in negotiating performance benchmarks for deals involving earnout provisions?
  • What post-closing concerns should buyers and sellers anticipate and address during deal negotiations?
  • What are the tax issues that counsel must understand and consider regarding earnouts?

Faculty

Herman, Dimitry
Dimitry Herman

Founder and Managing Partner
Herman Law

Mr. Herman serves as outside general counsel to growing technology companies and as deal counsel for venture...  |  Read More

Flanagan, Christopher
Christopher M. Flanagan

Partner
Locke Lord

Mr. Flanagan’s general corporate and partnership tax practice focuses on tax planning and analysis in the...  |  Read More

Live Webinar

Buy Live Webinar

Live Webinar

$297

Buy Live Webinar & Recording
A savings of $200

Live Webinar & Download

$394

Live Webinar & DVD

$394 + $9.45 S&H

Other Formats
— Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

48 hours after event

$297

Download

48 hours after event

$297

DVD

10 business days after event

$297 + $9.45 S&H